A fight brewing over the allocation of costs for transmission lines to connect wind and solar power plants to end users is the latest sign that fossil-fuel electricity producers are stepping up the fight against renewable energy sources.

A coalition of 10 big utilities this week announced it would oppose provisions in Senate bill 1462 that gives the Federal Energy Regulatory Commission authority to broadly allocate costs for long-distance transmission lines linking power sources to power users.

The industry coalition maintains that only those who benefit from the new lines should be obliged to pay for them. Or, putting it another way, a line connecting North Dakota wind farms to Chicago electricity consumers should be built across three intervening states only if those states also benefit from the power.

“Socializing the cost to transport clean energy from some regions will hurt clean energy developers in other regions, and will ultimately result in higher energy prices for everyone,” Ralph Izzo, CEO of coalition member PSEG, said in statement. “But if all developers have to include all their costs of delivering clean energy to customers, then they will seek to provide best overall value to customers.”

FERC has lobbied for this authority in order to promote renewable energy nationwide and to overcome the transmission bottlenecks arising from the regional decision-making in the industry. The Senate bill, known as the American Clean Energy Leadership Act, passed out of committee last June with bipartisan support.

As wind and other forms of renewable energy become a bigger factor in the nation’s electricity markets, traditional producers are fighting back against what they claim are unfair advantages.

In a front-page story this week, The Wall Street Journal described a feud in Texas where operators of natural gas-fired plants are trying to remove the exemption wind power producers have from paying a penalty when they fail to deliver their promised amount of electricity into the state’s grid because the wind did not blow as forecast.

Every producer commits a certain amount each day and all producers except wind power must pay a penalty if they don’t meet that commitment. For now, state authorities have rejected a penalty for wind producers, but alternative energy now faces stiffer opposition in Texas.

Intervening states can benefit from regional economic activity even if they are not using electricity. The entire utility system is an expensive gift to energy producers and utilities need to realize that their customers are the consumers, not the producers.

Now an arguement could be made against deals with wind companies where they are sheltered from the consequences of lower than expected production - it would depend on whether the losses from this practice are enough to outway benefits from this form of energy. Frankly, if you are not going to have a market driven system from start to finish then the parts which are controled by the government need to take the interests of the people into account. In addition to the direct price of energy, factors include, the over all price of fossil fuels (which could be lowered by renewables and affect both the economy and security) and air quality.

Wind is far from my favorite energy source and all renewables should be able to function without large government subsidies but when fossil fuel electricity producers have transmission lines run right up to their door because of government funding they hardly have a right to whine about others getting this also.

Anonymous on June 30 2010 said:

Now an arguement could be made against deals with wind companies where they are sheltered from the consequences of lower than expected production - it would depend on whether the losses from this practice are enough to outway benefits from this form of energy. Frankly, if you are not going to have a market driven system from start to finish then the parts which are controled by the government need to take the interests of the people into account. In addition to the direct price of energy, factors include, the over all price of fossil fuels (which could be lowered by renewables and affect both the economy and security) and air quality.

Anonymous on July 08 2010 said:

Texas is known as the state with the largest wind energy capacity in the United States, and if it were a country, it would rank sixth in the world. On the other side of the coin, the most recent data from U.S. Energy Information Administration shows that the state of Texas is being the largest emitter of carbon dioxide in the country, over 60% higher than California which ranks second in emissions but has a population nearly 50% higher than Texas. With such a record, it is no surprise that Texas Governor Rick Perry rejects the scientific evidence linking greenhouse gas emissions and climate change and marched the Environmental Protection Agency in federal court to prevent regulation of greenhouse gases.